Are you thinking about buying a home in the San Jose area? If you are looking for financing, the process can seem overwhelming, especially if you are a first-time buyer.
How do you know if you have found a good broker? Or the right loan? We have put together some tips below to help you find a lender that will meet your needs!
Determine if you are solo or need a broker
First, you’ll want to determine if you will be flying solo or using a mortgage broker. A broker makes their money from the lender when they refer you, which, like anything, has its pros and cons. They will likely be knowledgeable and be able to cut through the red-tape, helping you find the loan you are looking for. They should be doing the majority of the legwork, making the process easier on you. However, some brokers might try to persuade you into working with a lender that gives them the highest cut. It’s important you work with someone you can trust. Talk to people you know who have recently gone through the process themselves. Find out if they used a broker and how their experience was. If it is your first time buying real estate, using a broker will help you to learn the process.
If you do choose to work with a broker, make sure they are experienced in the type of loan you are hoping to get. Some brokers specialize in FHA loans, while others might know everything about USDA loans. A good mortgage broker will help you get the loan you need.
Whether or not you are working with a broker, you will want to compare rates from multiple lenders. And get loan offers from more than one source. Ask lenders for a loan estimate, which will breakdown all the numbers. Your monthly mortgage payment, interest rate, appraisals, commissions, taxes, fees, and more. Most people end up paying too much interest on their loan, which equates to thousands of dollars over the life of the loan. Shop around to get the lowest rate possible, and watch out for fees in the fine print. Don;t be afraid to let the lenders know you are current;y just shopping around. To get expert opinions about lenders, consult professionals you already know and trust. Seeking help from a financial advisor, attorney or accountant is a great first step. Research lenders online, and find out how their reviews stack up. Look for bad reviews and any red flags to make sure there aren’t consistent complaints from other borrowers.
Go to the bank
Another great place to find a lender is by simply going into the bank where you have your checking and savings accounts. They are ready to help at any time, just walk into the local branch and ask to speak with a loan officer. Most banks will also let you apply online. If your accounts are in good standing, and you have a history with them, your application process will be much easier.
When it is time to start the process of filling out applications, prepare yourself in advance. Your credit should be in order. Check it ahead of time and resolve any outstanding debts or blemishes. You’ll need old tax returns, pay stubs and bank statements. If you plan ahead, you won’t be surprised by last minute documents or expectations.
Feel comfortable when you find a lender
Most importantly, you should feel comfortable with the lender you choose. You shouldn’t feel pressured into getting a loan. A good loan officer will be approachable and knowledgeable, ready to share what is available to you. Buying real estate is a big step, and choosing the right people to work with is imperative.